Proposals are to be brought before Cabinet by Minister for Social Protection Heather Humphreys to ensure the State pension age remains at 66 rather than increasing to 68 as recommended by the Pension Commission.
It is understood that Ms Humphreys will recommend a flexible pension age which will allow people to work beyond 66 years if they wish.
Those who continue to work past 66 will receive higher pension payment rates.
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This would see the weekly State pension increase from €253 for 66-year-olds to €266 for 67-year-olds, €281 for 68-year-olds, €297 for 69-year-olds and €315 for 70-year-olds.
The new proposals would also see long-term carers qualifying for a contributory pension for the first time.
Following an actuarial review later in the year, how much of an increase in PRSI would be needed to fund the initiative will be determined.
A source has told RTÉ News that there would be no PRSI increase in the forthcoming budget and possibly not in the following budget due to the cost-of-living crisis.
It is understood that the new measures, if approved, would only come into force in January 2024 as the new system would require new legislation and IT systems.
The pension age has proven to be a major sticking point for voters and has caused much controversy between the Coalition parties.
Last July, Taoiseach Micheal Martin said he believed the State pension age should not go beyond the age of 66, as there was a "clear groundswell" within his party to retain it.
The previous September, Tanaiste Leo Varadkar told his Fine Gael party that he would oppose massive PRSI hikes for the self-employed, designed to help pay the State pension.
It is understood the minister's motivation in backing a flexible model rather than mandatory retirement at 66 is because the qualification for a pension is an arbitrary date, and the policy is not in line with EU norms.
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